Bitcoin (BTC) may have traded sideways for most days of last month thanks to Grayscale, but it will soon change. According to CryptoQuant, the price premium of the Grayscale Bitcoin Trust (GBTC) just hit its lowest since April 2019. Grayscale may jumpstart the next phase of the Bitcoin bull run tomorrow.
Grayscale lock-up ends Wednesday
Grayscale has made the headlines several times this year thanks to record Bitcoin purchases and record demand, but despite the inflows, BTC/USD has not continued to go up.
As February begins, the Trust’s purchase premium is at around $6.50, having been as high as $40 before over the course of its existence. This historically coincides with meandering price direction, while large premiums equal large upside moves for BTC.
In late December, a dedicated article in technology magazine Hackernoon explained the phenomenon as being tied to releases of GBTC shares which have been subject to a customary lock-up.
When they are released, Bitcoin will shoot higher as customers put their profits back into BTC, while the time preceding such events corresponds to a lack of price action.
“What’s important to know is once these higher prices and premiums are realized after an unlocking, price goes on to consolidate. This lets the premium shrink again before its next unlocking event,” Hackernoon summarized.
With the next unlocking set for Feb. 3, anticipation should be building for a continuation of the Bitcoin bullish trend.
“This voids enables premiums to shrink again just like the nine times before,” the article said, correctly predicting the price behavior for the second half of January.
“And it’ll keep shrinking until the next unlocking. Because of this I expect price to either consolidate or sag.”
No sag for Grayscale investment
Grayscale meanwhile is going to expand its offerings as institutional interest broadly shows no signs of slowing for Bitcoin and altcoins.
This week saw its Ethereum Trust reopen after being closed since December, while Feb. 25 will see Grayscale sponsor crypto-focused event the Bloomberg Crypto Summit.
GBTC had $21.8 billion in assets under management as of Feb. 1. Ethereum (ETH) purchases have been on pause since Dec. 10.